Gold's $300 Plunge: A Healthy Correction or a Serious Warning Sign?
Summary
Market Outlook: Gold and silver experienced significant price drops, with gold falling over 5% and silver nearly 9%, yet both metals remain among the year's top performers, up 55% and 60% respectively.
Investment Opportunity: Rich Checkin of Asset Strategies International views the recent sell-off as a buying opportunity, emphasizing that the fundamentals of gold and silver remain unchanged.
Market Dynamics: The sell-off is attributed to a "risk-on" rotation due to easing US-China trade tensions, but Checkin argues it's a healthy correction in an overbought market.
Portfolio Strategy: Prominent investors like Ray Dalio and Morgan Stanley recommend significant portfolio allocations to gold, suggesting a shift in mainstream investment strategies towards precious metals.
Physical Market Insights: Despite rumors of shortages, refiners like the Perth Mint are adjusting production to meet retail demand, indicating strong investor interest in physical gold and silver.
Central Bank Activity: Central banks continue to purchase gold at record rates, supporting the long-term bullish outlook for precious metals as they seek to diversify away from the US dollar.
Investment Advice: Checkin advises starting with gold for wealth insurance and then considering silver for its profit potential, highlighting the importance of precious metals in a diversified portfolio.
Long-term Perspective: Despite short-term volatility, the consensus is to focus on the long-term fundamentals of gold and silver, with potential for significant price increases driven by central bank demand and investor participation.
Transcript
Welcome back to KCO News. I'm Jeremy Saffron. Now, the story dominating the markets is the continued pressure on precious metals. Looking at spot prices right now, gold is trading just above $4,000 an ounce this morning, down about 2% on the day. Silver holding near $48, down about 1%. And this follows a shock to the markets the last 48 hours. On Monday, gold surged to a historic all-time high of about 4380 an ounce on spot. But the Tuesday's close, it had logged its sharpest single day percentage drop since 2013, plunging more than 5%. Silver was hit even harder, near down nearly 9%, marking its largest single day fall since February of 2021. But context matters now. We can pull up the chart again. Even after this violent pullback, gold remains one of the year's best performing assets, still roughly up 55% year-to date. Silver is also continuing that about 60% year to date. Uh, pretty nice chart there. Now, the Wall Street narrative is that this was a classic risk on rotation. And President Trump's optimistic comments on a potential US China trade deal reportedly sent money flooding out of the safe havens and into equities, lifting the Dow Jones industrial average to a new record high. But as always, the story behind the headlines may be very different. And we got them here right here on Kiko News. Our guest today has been talking about it. He says this isn't a panic, it's an opportunity. Joining us now is Rich Checkin. He is the president of Asset Strategies International. And in an email this morning, Rich, uh we were chatting back and forth. You called this sell off a a massive opportunity to buy, saying that there's been no change in fundamentals. Uh great to see you. Thanks for joining us. >> Uh it's great to be here. And yes, it is a massive opportunity. This is something you embrace. This is not something you cower and fear uh from. >> Yeah. Yeah. And I mean, you know, again, the context is is important here, right? I mean, gold up still 55% this year. It's still firmly in place. Uh what's the market getting wrong here? I mean, it's a strong statement against the title wave of selling, right? >> Well, you know, it it's actually back to the old narrative. Um, when you It's funny how every time there's a sell-off in equities markets, >> uh, everybody basically comes out and says, you know, just hold on. It you need to hold on for the long term. There's no reason to panic, no reason to sell. You're fine. Your money's safe. Every time gold pulls back, everybody's saying, that's it. It's the end. Gold's done. Time to move on. Why are we in it in the first place? And I thought we were seeing a change in that narrative to be honest with you when you saw the news come out where uh basically Ray Dalio was saying you ought to have 15% of your portfolio in precious metals. Morgan Stanley came out and said you ought to have uh 20% of your portfolio uh in precious met actually specifically in gold. I thought maybe maybe the mainstream was starting to come around to the the idea that gold is not a barbarous relic. It is something useful in a portfolio. Um and then you know we hear these things on the pullback which are just utter nonsense uh until fundamental changes. >> Gold's just happy in the bull market and taking a pause that refreshes. >> I mean I mean analysts are directly attributing the selloff obviously to those easing US China trade tensions. I mean it seems like every time I look at the station and in and our news headlines they are changing. So obviously it's a developing story, but the Dow hit this record high and it seemed to confirm that money is voting for optimism. I mean not not fear in this market. I'm curious about this risk on narrative and this smoke stream for what really happened. I mean was this simply a a technical, you know, house cleaning of an overbought market that was kind of inevitable here? >> Yeah, I I absolutely believe that that's the case that, you know, gold had been going up. I mean, at one point it was going up what about 100 bucks uh a week. Um, and that's that's pretty lofty territory without some sort of correction. You've got to backfill that market for it to be healthy. Healthy markets stair step up. They don't shoot up like a rocket. Um, so this is our first step back in a long time and it's it's long overdue, but it is absolutely healthy and necessary and and I think you know when when the pullback happens, anybody can talk to why in retrospect they think it happened. I mean, okay. So, so we have maybe a little bit of a thawing in in the trade war with US and China. Um, but is that enough to make this kind of move when a week earlier uh the the historic peace deal between Hamas and uh Israel didn't budge at all? Sends gold and silver even higher. I just don't buy into that. I think this is just a healthy correction and and if you read more into that, you're reading too much probably. >> Let's you know, it's interesting. I was going back in some of your newsletters too and your October newsletter published before this crash. I mean, you specifically noted that the runup lacked the euphoria and kind of lines around the block of a true market top. You've seen multiple bull and bare markets. I I want to talk a little bit about the the psychology of this market. I mean, you just said that there's a lot of people emotional in this market. They're they're worried about this 5% correction. I mean, why are the emotional signals that you're seeing today kind of telling you that this is a healthy pause, not a panicked exit? I mean, talk to talk to the worried people out there. >> Yeah. Well, the thing is, and this is what I told my staff the very next morning, uh, is what fundamentally has changed. >> And if the answer is nothing, then this is just a correction. So you you look at fundamentals, you look at the gold price. Uh I mean, conservatively, we're looking at two to three times the pre previous bull market high, which was $1,900. So conservatively, you're looking at 3,800 to $5,700 gold. We're we're just smack dab in the middle of that range. And again, I think that's conservative cuz this has been a weird market. Um, we had price escalation, price appreciation in gold for a long time before the inventor investors even got a whiff of this market and it was all central bank driven. I think you can make the argument that we really only started over the past year or two uh to see investors participate in this gold market and now we are just starting to see them participate in the silver market. So I think we can actually go much higher than that 5700 you know gold price number um that we got a head start if you will from central banks and that goes into the duration as well. These usually last about 10 years or more. Um we're not even there yet but I think again with the the central bank head start I think we have an even longer horizon forward. Uh interest rates interest rates are low. Um, you need high singledigit, low double-digit interest rates to dissuade people from owning gold and to steer them toward term deposits. We're at what 4 to 4 and a quarter and we're going down. Okay, probably again next week. Uh, gold silver ratios at astronomic levels still above 80. I think it's about 83 84 today. Um, the Dow gold ratio should get down to about five at the end of this bull market. It's at 11 a.5. Uh, sentiment is just not there. The dollar is weak. We still have geopolitical concerns. We still have domestic unrest. What has changed, Jeremy, to make the price come down other than President Trump and Xi Jinping are going to talk? That's it's just not enough. >> Yeah. Yeah. And to your point, I mean, you were talking about how weird the market is. And of course, we saw that backwardation, too. I mean, let's talk about the physical market where the story seems to be very different from this paper crash. I mean, we're hearing reports that major refiners like the Perth Mint are now focusing their production solely on the most in demand retail products like the 1oz coins and the kilo silver bars. This has sparked obviously social media rumors that they're running out of silver. You've indicated that that's not the case. Uh can you walk us in our audience through what's really happening here? What does the shift in production tell us about retail demand and what's happening to premiums and delivery times when this kind of pressure builds on the supply chain? Yeah. Well, it's actually a great way to take the pulse of the investor market. You know, for the longest time with gold prices at all-time highs, um the premiums were the lowest levels I've seen in 30 years. Again, that doesn't suggest this is an investor-driven bull market. It was strictly driven by central banks. That is starting now to change, right? So, investors are getting into this market. And we can tell because central banks don't buy silver, they do buy gold. um investors buy both. So the fact that the silver price has been moving over the past couple months suggests that silver is now in play and investors are now still in play. So we're going to start to see premiums rise and we are seeing it on a couple items but not everything just yet. We're going to start to see delivery times ramp up as well. instead of having something shipped out immediately when you wire funds in, there might be a three to seven uh day delay before it goes out. Um, and at the height of the bull market, it's going to be even longer than that. Uh, this is not uncommon. The the the folks out there that see this and and they want a 100 ounce bar from the the Perth Mint and they aren't going to get it. They're going to say right away, "Oh my god, Perth Mint is out of silver." And and Jeremy, nothing could be further from the truth. They're just being smart about this. They say, "Listen, people buy 1oz gold and silver coins. They buy kilo silver bars. That's where we're going to focus our minting attention uh in order to be able to to meet the demand that we know and feel and see is coming. And it's just a smart move from their point. Uh they're nowhere near out of silver. Um they just want to put it in the right forms that people are going to consume. That's all." >> Okay. So, I mean, you know, the the US mint sales and Perth mint sales output, you know, they haven't exploded. I mean premiums are elevated like you said but not extreme. Could this be early positioning from seasoned investors rather than the broad retail surge we saw in 2020 2021? >> It it could be. I mean who knows in the in the end uh you know where I stand on this. You need to have gold in your portfolio whether you're a seasoned or just a casual investor. Um we are not doing a good job of fixing our problems. Uh we're we're about to go over if we haven't done it while we're talking uh $ 38 trillion in debt here in the US. Um we're uh mismanaging our currency. We're overspending. Government is dysfunctional here in the US. They can't get their act together. And they're not even meeting to talk about it for God's sake. just blaming each other about who's wrong and why the government shut down as opposed to balancing of budget which does not then force them to expand the money supply which then does not force prices upward for gold a cup of coffee or anything. Um so we're not solving any of these problems. Gold's going higher. You need to have it in your portfolio uh no matter what your your underlying composition is. >> Yeah. The mainstream is now calling the debasement trade. I mean, we've been covering this for years as you know, Rich, I wanted to ask you. >> Yeah, exactly. It's not new. Um, okay. Well, I got to ask you, we were talking a little bit about the physical and I want to get a little bit more deeper into that plumbing of the market because our audience is fascinated by it. I mean, we're seeing commentary this morning from former JP Morgan bullion executive uh Robert Gautlib, which is Bob, I guess, uh, he goes by. He's pointing to some very specific data on the arbitrage between London and New York silver market showing that the extreme stress and backradation in London is easing rapidly. That price gap that made it so profitable to ship metals from New York to London is closing fast. His analysis raises a critical question. Does this mean the physical squeeze in London is over? Right? I mean we've been asking audience been really active on X about this or as he speculates you know could this be the prelude to an even bigger drain of physical silver from comx vaults to satisfy that underlying demand. I'm curious about what your thoughts are on here. >> Yeah to my understanding it's the latter that that we are seeing uh you know uh bullion banks standing for delivery um and ship that metal to London. Uh a lot of that is to to meet the demand there. A lot of that's coming out of India. Um, and the bottom line is the metal was in the wrong place. Clearly, a lot of it was shipped from London to the US in order to avoid the tariffs. They did it ahead of the tariffs. Um, and then they got kind of stuck because it was not where it needed to be. Um, I I'm I'm not big into that part of the the market. Obviously, I deal in the retail sector, but I will tell you that my understanding here is the the real liquidity has got to come from ETFs. and and I don't know that those people are getting ready to uh uh disavow themselves of uh silver and gold right now. >> Yeah, it's interesting. Uh well, we'll we'll have Bob on the show, too. I want to get that into that a little bit more. Uh let's talk a little bit about you know, this whole there's so many things we could talk about, but you were bringing up central bank demand and, you know, essentially the bedrock of this bull market, right? I mean, that huge pillar has been this relentless buying from central banks looking to dd dollararize as we've been talking about. um they're continuing to buy at the fastest rate in decades. I'm curious, you know, if they're if it doesn't look or appear like they're stopping at $4,000 gold, $4,300 gold. Uh why would a technical sell-off in the futures market matter to a sovereign wealth fund executing a multi-deade strategy to move away from the US dollar? >> Yeah, I don't think it will at all. And and I do not see them slowing down. And and it's funny to kind of put this in perspective. I you know I was crunching some numbers when when we reached out via email what a couple weeks ago right um and you know the I I reached out on the news that Morgan Stanley changed its guidance right so just I'm going to do a numbers dump on everybody here so if Morgan Stanley with 4.8 trillion in assets under management uh goes ahead and shifts 20% of those portfolios from bonds to gold uh 20% of 4.8 8 trillion is 960 billion. That translates to 240 million ounces of gold. Uh with a kilo at 32,151 troy ounces, that means you're going to have 7.4 or 7,465 metric tons of gold needed to meet Morgan Stanley's demand. Let's put that in perspective with the central banks. US is the number one holder of gold reserves at 8,133 metric tonses. >> Mhm. >> Over the past 3 and 1/2 years, the central banks have been buying at a clip of about a,000 metric tonses a year. So that's 3 12,000 metric tons of gold over 3 and 1/2 years has been enough to send the gold market to new all-time highs for several years on end until right now investors are starting to wake up. Can you imagine the impact of just a part of the Morgan Stanley uh assets under management going into gold? I mean that that number is double what has happened already over the past three and a half years to take us to this point. Um I do not see central banks slowing down. I think and I've said this before, we need to follow their lead. They have created this problem. They expanded the money supplies that have led to price inflation. Okay. Um, so the bottom line is if they're taking these steps in order to protect themselves, I think we should pay attention and do the same for ourselves. >> So even, you know, assuming Morgan Stanley's clients don't immediately shift all of that capital into gold, this recommendation still raises the question of of where else money comes from. I mean, if it comes out of bonds or equities, then gold becomes not just a metal trade, but kind of that major portfolio rebalancing event that we've been talking about. Such events, I mean, tend to take time and produce adjustments in other markets. The sheer scale suggests that this may be that more long-term structural shift that you're talking about. Not not an imminent price explosion. >> 100% agree. And and it's not everybody's going to do it either. I mean, not all of that 4.8 trillion's going, but they're one brokerage firm. Um, again, you've got Ray Dalio saying you ought to have 15% in gold. If that thinking, you know, anywhere from five to to 20% in gold becomes mainstream, that's a te te tectonic shift, I mean, if you if you look at the average um worldwide for gold penetration in a portfolio, it's about 2% uh over time. Uh right now, we're about 1/ half of 1% worldwide. Imagine if everybody embraces the idea of Jesus just 5% in gold. I mean, I like 10% for net worth, but just 5% in gold. That's a a scale of magnitude of 10 times what they're holding right now. It's massive. >> Yeah. Hey, let's shift gears a bit because I mean, while Wall Street's finally waking up to to gold, it appears. I mean, there's that other story catching fire with investors right now. It's not about institutions or algorithms. It seems like it's it's about people lining up, you know, at coin shops. I keep talking to people about Costco being sold out. Silver is not the only metal getting attention here. We're seeing a surprising revival of interest to collectible and vintage gold coins, even fractional pieces. Um, have you had any of this on the buying side? I know you got some insight here. I mean, when you talk to buyers who are just stepping into the market for the first time, what are they asking for? Are they chasing ounces or stories? The historic pieces, the tangible connection to value? Yeah, I I I would say my my advice here is just a word of caution. Be careful if you're just getting into this market and the and you need to own metal, you don't own any gold at all and the dealer you're talking to suggests that you get into rare coins. Uh it's not the first step. Okay. Um they're suggest the dealer suggesting that because the margins are much better for them and that's going to be better for them. It's not necessarily better for you. I think the first step always is going to be start with gold and silver bullion and you take delivery of that. Okay. Um so that's what people that come to us are hearing. Um and that's largely what they're buying. The premiums in the the collectibles market have kind of come down and stayed there for a long period of time. Uh there's still plenty of metal in the marketplace being absorbed. um you know, collectible metal in the marketplace being absorbed and those premiums haven't really ramped back up except for the very very high-end merchandise. Um that is completely unflawed. I mean, the the buyers are very very particular and picky right now. Um so that's the merchandise that's doing well. The generic material is not doing well. It will um but it's not really doing well right now. You can get some at better premiums, but I still think your first step when you when you wait into this market is going to be bullion. That's how you get your wealth insurance in place. You can diversify into collectibles afterward would be my suggestion. >> And you know, we all go into X and we see these lineups in China and Shenzhen and what have you. Are you experiencing the same thing? I mean, are there real lineups and these rapid sellouts? What or is it more the steady buying from from seasoned investors? Uh I I think right now it's still the steady buyer buying from seasoned investors, although they are starting to refer their friends, you know. So we're we're getting calls from people I haven't talked to in a while. Um you know, we've reached out to them over the past few years, but they're reaching out to us now and they're saying, "Oh, by the way, I have one or two or three people that that I I need to to have a conversation with you. They need to take care of some gold." So, we're starting to see that. Um you know, I don't have a storefront where you line up around the block and and and buy. Um we're far from from that. For us, we see it on the the phone volume. Uh the last bull market uh late stage 2009 2010, you know, with six sales reps on the phones, we had 200 calls an hour incoming. >> All right. We're not there. We are not there. Um >> just starting. >> It is absolutely picking up. We have a a wave, a ripple. We don't have a tsunami just yet. >> Yeah. So, I mean I mean you called this a massive opportunity. So, let's get specific. I mean, you've previously defined gold as as wealth insurance and silver is kind of for its profit potential. For the investor with cash today, why should they choose one over the other? I mean, is it time to be buying insurance or is it kind of time to be speculating on profit? >> Yes. >> So, easy answer. >> Yeah, I think you need both. Um, here I always Jeremy with me, the first is going to be gold. It's always going to be gold. You take care of your insurance first. When when I first got here, I didn't have two nickels to scratch together. Um, and I wanted to work with a financial adviser. The first thing they did, they didn't talk about stocks to own or anything like that. First thing we did is we put our insurance house in order. We're talking about homeowners, auto, uh, umbrella policies, whatever the case might be. And you build that that protection for when you start filling the house up, uh, so to speak. And I think it's the same same way with precious metals. The first thing you do is you buy that gold, that wealth insurance, that proven store of purchasing power for that financial crisis you hope you never have with basically the highest liquidity of anything out there in the marketplace right now. So, start with gold. Um, you still have plenty of upside. Uh, cuz even if your motivation is insurance, you're still going to want to see it go up, right? Um, that we're just that's natural. That's ingrained in all of us. Um, and you still have plenty of upside here. uh then I think you look to silver uh for profit. I I I don't think uh we're anywhere near the end. I think at the end of this market, at the end of this bull market, you know, looking at 45-year cup and handle formations for silver, uh you're probably getting to $90 to $100 an ounce. Uh at a 50 to1 ratio, you're looking at at least $5,000 gold at a bare minimum. Um, but if you look at the Dow gold ratio, uh, to get that down to five, you either need what, $89,000 gold or the Dow's got to drop to 20,000. Uh, somewhere in the middle is probably the answer. I think you've got plenty of room to grow on both metals. >> Yeah. Okay. This is good. This is a good way to to sum it up because I had a note here. I mean, I was going to ask you for your outlook, right? I mean, uh, we talked about $5,000 gold. Let's also get it on the silver, but I'm curious more than that. I mean, what's the indicator that you're kind of watching to confirm it right now? I mean, is it the gold silver ratio, which you've said signals retail participation? Is it physical premiums or is it something else? I mean, what what's that specific data point that the audience should should really understand by what's coming next? >> Yeah. Well, I I gave you a whole list of indicators that I look at, and the way I look at them is it's not one or the other. I don't think any of one anyone is more important than the next. I think you need to start three start to see three or four of them converging kind of like rain clouds and if you have enough of them you're going to get some rain. Um and that's that's when it's time to start looking for the exits. We don't see any of these indicators firing right now. And when I look to where the the gold and silver prices can go, uh one of the things I look at for silver is the gold silver ratio. And like I said, that kind of confirms a 100 to to 5,000 silver to gold, right? um with uh the cup and handle formation on silver, it kind of confirms that at $90 to $100 an ounce silver uh with the breakout that we saw earlier this year. With gold, again, I think the central banks gave us a head start. I still think that $5,700 is probably conservative by the end of this bull market. Um but I tend to be more conservative. I don't have the legs to be a cheerleader. >> Yeah. Yeah. Well said. Okay. I got to play devil's advocate, too. I mean, if we see a sharp rebound in interest rates and the dollar strengthens or maybe we see central banks pause or reverse purchases, what's the scenario where gold, you know, where the where the premium on gold and silver collapses? Do you think it's maybe an oversold rally? I mean, it seems like we're not going to go below certain points anymore. It seems like with all this debt, it's been revalued. >> Yeah, I I do believe it has been revalued, and I don't think we're going to see the the the rug pulled out from under us, if you will. I think you'll see signs that it's coming down, but again, these indicators have to start firing. Gold doesn't come down unless these things start to happen. None of them are happening. That's what you watch for. Um, and when we start to see them come together, we see that conversion. We see the uh gold or the convergence. We see the gold silver ratio down 35 to 50. We see the gold price hitting those targets, the silver price hitting those targets. The duration is somewhere 5 to 10 years down the line. Um, when all of that comes together, interest rates are going up, the dollar is getting stronger, which by the way, it is not. Um, and I I don't buy the past week where it went from 9889 to 9908. I mean, that's just not enough to show strength. When when all that starts coming together, um, then you'll know and you can start easing your way out of the market. If you bought the metal for insurance, you're not going to sell it anyway. I don't care if it goes to $200. It's still going to do its job in terms of preserving purchasing power, but what you bought for profit, you would start selling and I would average out of the market just like you moved into it. >> Yeah, well said. All right, Rich. Uh, appreciate this. It feels like you're buying the dip out here. I mean, you've been in this a long time. You see anything like this? It doesn't worry you. I mean, it seems like it's conviction in the face of volatility here. >> Well, there's no question, J. I mean, we've seen this before. The the the bull market from 01 to 2011. Um, you remember when it got up to what, uh, 750 or 800, something like that? It dropped back down to $4,500 an ounce. Everybody said, "It's over. We're done. Run for the hills." And, and it didn't stop till it got to 1921. So, yeah, we've seen this before. No panic here. Embrace it. >> All right, Richen of Asset Strategies International joining us. Thanks for your time and your insights on this pivotal day in the markets. Uh, once again, my friend, I'll see you soon. >> Looking forward to it. Thanks, Jeremy. >> Appreciate your time. All right, for our viewers, the message is clear. look past the short-term noise and focus on the long-term fundamentals. Now, we'll be tracking this story closely as always, just for you. Subscribe here to Kiko News for the latest updates. I'm Jeremy Saffron, and we'll see you next time. Heat. Heat.
Gold's $300 Plunge: A Healthy Correction or a Serious Warning Sign?
Summary
Transcript
Welcome back to KCO News. I'm Jeremy Saffron. Now, the story dominating the markets is the continued pressure on precious metals. Looking at spot prices right now, gold is trading just above $4,000 an ounce this morning, down about 2% on the day. Silver holding near $48, down about 1%. And this follows a shock to the markets the last 48 hours. On Monday, gold surged to a historic all-time high of about 4380 an ounce on spot. But the Tuesday's close, it had logged its sharpest single day percentage drop since 2013, plunging more than 5%. Silver was hit even harder, near down nearly 9%, marking its largest single day fall since February of 2021. But context matters now. We can pull up the chart again. Even after this violent pullback, gold remains one of the year's best performing assets, still roughly up 55% year-to date. Silver is also continuing that about 60% year to date. Uh, pretty nice chart there. Now, the Wall Street narrative is that this was a classic risk on rotation. And President Trump's optimistic comments on a potential US China trade deal reportedly sent money flooding out of the safe havens and into equities, lifting the Dow Jones industrial average to a new record high. But as always, the story behind the headlines may be very different. And we got them here right here on Kiko News. Our guest today has been talking about it. He says this isn't a panic, it's an opportunity. Joining us now is Rich Checkin. He is the president of Asset Strategies International. And in an email this morning, Rich, uh we were chatting back and forth. You called this sell off a a massive opportunity to buy, saying that there's been no change in fundamentals. Uh great to see you. Thanks for joining us. >> Uh it's great to be here. And yes, it is a massive opportunity. This is something you embrace. This is not something you cower and fear uh from. >> Yeah. Yeah. And I mean, you know, again, the context is is important here, right? I mean, gold up still 55% this year. It's still firmly in place. Uh what's the market getting wrong here? I mean, it's a strong statement against the title wave of selling, right? >> Well, you know, it it's actually back to the old narrative. Um, when you It's funny how every time there's a sell-off in equities markets, >> uh, everybody basically comes out and says, you know, just hold on. It you need to hold on for the long term. There's no reason to panic, no reason to sell. You're fine. Your money's safe. Every time gold pulls back, everybody's saying, that's it. It's the end. Gold's done. Time to move on. Why are we in it in the first place? And I thought we were seeing a change in that narrative to be honest with you when you saw the news come out where uh basically Ray Dalio was saying you ought to have 15% of your portfolio in precious metals. Morgan Stanley came out and said you ought to have uh 20% of your portfolio uh in precious met actually specifically in gold. I thought maybe maybe the mainstream was starting to come around to the the idea that gold is not a barbarous relic. It is something useful in a portfolio. Um and then you know we hear these things on the pullback which are just utter nonsense uh until fundamental changes. >> Gold's just happy in the bull market and taking a pause that refreshes. >> I mean I mean analysts are directly attributing the selloff obviously to those easing US China trade tensions. I mean it seems like every time I look at the station and in and our news headlines they are changing. So obviously it's a developing story, but the Dow hit this record high and it seemed to confirm that money is voting for optimism. I mean not not fear in this market. I'm curious about this risk on narrative and this smoke stream for what really happened. I mean was this simply a a technical, you know, house cleaning of an overbought market that was kind of inevitable here? >> Yeah, I I absolutely believe that that's the case that, you know, gold had been going up. I mean, at one point it was going up what about 100 bucks uh a week. Um, and that's that's pretty lofty territory without some sort of correction. You've got to backfill that market for it to be healthy. Healthy markets stair step up. They don't shoot up like a rocket. Um, so this is our first step back in a long time and it's it's long overdue, but it is absolutely healthy and necessary and and I think you know when when the pullback happens, anybody can talk to why in retrospect they think it happened. I mean, okay. So, so we have maybe a little bit of a thawing in in the trade war with US and China. Um, but is that enough to make this kind of move when a week earlier uh the the historic peace deal between Hamas and uh Israel didn't budge at all? Sends gold and silver even higher. I just don't buy into that. I think this is just a healthy correction and and if you read more into that, you're reading too much probably. >> Let's you know, it's interesting. I was going back in some of your newsletters too and your October newsletter published before this crash. I mean, you specifically noted that the runup lacked the euphoria and kind of lines around the block of a true market top. You've seen multiple bull and bare markets. I I want to talk a little bit about the the psychology of this market. I mean, you just said that there's a lot of people emotional in this market. They're they're worried about this 5% correction. I mean, why are the emotional signals that you're seeing today kind of telling you that this is a healthy pause, not a panicked exit? I mean, talk to talk to the worried people out there. >> Yeah. Well, the thing is, and this is what I told my staff the very next morning, uh, is what fundamentally has changed. >> And if the answer is nothing, then this is just a correction. So you you look at fundamentals, you look at the gold price. Uh I mean, conservatively, we're looking at two to three times the pre previous bull market high, which was $1,900. So conservatively, you're looking at 3,800 to $5,700 gold. We're we're just smack dab in the middle of that range. And again, I think that's conservative cuz this has been a weird market. Um, we had price escalation, price appreciation in gold for a long time before the inventor investors even got a whiff of this market and it was all central bank driven. I think you can make the argument that we really only started over the past year or two uh to see investors participate in this gold market and now we are just starting to see them participate in the silver market. So I think we can actually go much higher than that 5700 you know gold price number um that we got a head start if you will from central banks and that goes into the duration as well. These usually last about 10 years or more. Um we're not even there yet but I think again with the the central bank head start I think we have an even longer horizon forward. Uh interest rates interest rates are low. Um, you need high singledigit, low double-digit interest rates to dissuade people from owning gold and to steer them toward term deposits. We're at what 4 to 4 and a quarter and we're going down. Okay, probably again next week. Uh, gold silver ratios at astronomic levels still above 80. I think it's about 83 84 today. Um, the Dow gold ratio should get down to about five at the end of this bull market. It's at 11 a.5. Uh, sentiment is just not there. The dollar is weak. We still have geopolitical concerns. We still have domestic unrest. What has changed, Jeremy, to make the price come down other than President Trump and Xi Jinping are going to talk? That's it's just not enough. >> Yeah. Yeah. And to your point, I mean, you were talking about how weird the market is. And of course, we saw that backwardation, too. I mean, let's talk about the physical market where the story seems to be very different from this paper crash. I mean, we're hearing reports that major refiners like the Perth Mint are now focusing their production solely on the most in demand retail products like the 1oz coins and the kilo silver bars. This has sparked obviously social media rumors that they're running out of silver. You've indicated that that's not the case. Uh can you walk us in our audience through what's really happening here? What does the shift in production tell us about retail demand and what's happening to premiums and delivery times when this kind of pressure builds on the supply chain? Yeah. Well, it's actually a great way to take the pulse of the investor market. You know, for the longest time with gold prices at all-time highs, um the premiums were the lowest levels I've seen in 30 years. Again, that doesn't suggest this is an investor-driven bull market. It was strictly driven by central banks. That is starting now to change, right? So, investors are getting into this market. And we can tell because central banks don't buy silver, they do buy gold. um investors buy both. So the fact that the silver price has been moving over the past couple months suggests that silver is now in play and investors are now still in play. So we're going to start to see premiums rise and we are seeing it on a couple items but not everything just yet. We're going to start to see delivery times ramp up as well. instead of having something shipped out immediately when you wire funds in, there might be a three to seven uh day delay before it goes out. Um, and at the height of the bull market, it's going to be even longer than that. Uh, this is not uncommon. The the the folks out there that see this and and they want a 100 ounce bar from the the Perth Mint and they aren't going to get it. They're going to say right away, "Oh my god, Perth Mint is out of silver." And and Jeremy, nothing could be further from the truth. They're just being smart about this. They say, "Listen, people buy 1oz gold and silver coins. They buy kilo silver bars. That's where we're going to focus our minting attention uh in order to be able to to meet the demand that we know and feel and see is coming. And it's just a smart move from their point. Uh they're nowhere near out of silver. Um they just want to put it in the right forms that people are going to consume. That's all." >> Okay. So, I mean, you know, the the US mint sales and Perth mint sales output, you know, they haven't exploded. I mean premiums are elevated like you said but not extreme. Could this be early positioning from seasoned investors rather than the broad retail surge we saw in 2020 2021? >> It it could be. I mean who knows in the in the end uh you know where I stand on this. You need to have gold in your portfolio whether you're a seasoned or just a casual investor. Um we are not doing a good job of fixing our problems. Uh we're we're about to go over if we haven't done it while we're talking uh $ 38 trillion in debt here in the US. Um we're uh mismanaging our currency. We're overspending. Government is dysfunctional here in the US. They can't get their act together. And they're not even meeting to talk about it for God's sake. just blaming each other about who's wrong and why the government shut down as opposed to balancing of budget which does not then force them to expand the money supply which then does not force prices upward for gold a cup of coffee or anything. Um so we're not solving any of these problems. Gold's going higher. You need to have it in your portfolio uh no matter what your your underlying composition is. >> Yeah. The mainstream is now calling the debasement trade. I mean, we've been covering this for years as you know, Rich, I wanted to ask you. >> Yeah, exactly. It's not new. Um, okay. Well, I got to ask you, we were talking a little bit about the physical and I want to get a little bit more deeper into that plumbing of the market because our audience is fascinated by it. I mean, we're seeing commentary this morning from former JP Morgan bullion executive uh Robert Gautlib, which is Bob, I guess, uh, he goes by. He's pointing to some very specific data on the arbitrage between London and New York silver market showing that the extreme stress and backradation in London is easing rapidly. That price gap that made it so profitable to ship metals from New York to London is closing fast. His analysis raises a critical question. Does this mean the physical squeeze in London is over? Right? I mean we've been asking audience been really active on X about this or as he speculates you know could this be the prelude to an even bigger drain of physical silver from comx vaults to satisfy that underlying demand. I'm curious about what your thoughts are on here. >> Yeah to my understanding it's the latter that that we are seeing uh you know uh bullion banks standing for delivery um and ship that metal to London. Uh a lot of that is to to meet the demand there. A lot of that's coming out of India. Um, and the bottom line is the metal was in the wrong place. Clearly, a lot of it was shipped from London to the US in order to avoid the tariffs. They did it ahead of the tariffs. Um, and then they got kind of stuck because it was not where it needed to be. Um, I I'm I'm not big into that part of the the market. Obviously, I deal in the retail sector, but I will tell you that my understanding here is the the real liquidity has got to come from ETFs. and and I don't know that those people are getting ready to uh uh disavow themselves of uh silver and gold right now. >> Yeah, it's interesting. Uh well, we'll we'll have Bob on the show, too. I want to get that into that a little bit more. Uh let's talk a little bit about you know, this whole there's so many things we could talk about, but you were bringing up central bank demand and, you know, essentially the bedrock of this bull market, right? I mean, that huge pillar has been this relentless buying from central banks looking to dd dollararize as we've been talking about. um they're continuing to buy at the fastest rate in decades. I'm curious, you know, if they're if it doesn't look or appear like they're stopping at $4,000 gold, $4,300 gold. Uh why would a technical sell-off in the futures market matter to a sovereign wealth fund executing a multi-deade strategy to move away from the US dollar? >> Yeah, I don't think it will at all. And and I do not see them slowing down. And and it's funny to kind of put this in perspective. I you know I was crunching some numbers when when we reached out via email what a couple weeks ago right um and you know the I I reached out on the news that Morgan Stanley changed its guidance right so just I'm going to do a numbers dump on everybody here so if Morgan Stanley with 4.8 trillion in assets under management uh goes ahead and shifts 20% of those portfolios from bonds to gold uh 20% of 4.8 8 trillion is 960 billion. That translates to 240 million ounces of gold. Uh with a kilo at 32,151 troy ounces, that means you're going to have 7.4 or 7,465 metric tons of gold needed to meet Morgan Stanley's demand. Let's put that in perspective with the central banks. US is the number one holder of gold reserves at 8,133 metric tonses. >> Mhm. >> Over the past 3 and 1/2 years, the central banks have been buying at a clip of about a,000 metric tonses a year. So that's 3 12,000 metric tons of gold over 3 and 1/2 years has been enough to send the gold market to new all-time highs for several years on end until right now investors are starting to wake up. Can you imagine the impact of just a part of the Morgan Stanley uh assets under management going into gold? I mean that that number is double what has happened already over the past three and a half years to take us to this point. Um I do not see central banks slowing down. I think and I've said this before, we need to follow their lead. They have created this problem. They expanded the money supplies that have led to price inflation. Okay. Um, so the bottom line is if they're taking these steps in order to protect themselves, I think we should pay attention and do the same for ourselves. >> So even, you know, assuming Morgan Stanley's clients don't immediately shift all of that capital into gold, this recommendation still raises the question of of where else money comes from. I mean, if it comes out of bonds or equities, then gold becomes not just a metal trade, but kind of that major portfolio rebalancing event that we've been talking about. Such events, I mean, tend to take time and produce adjustments in other markets. The sheer scale suggests that this may be that more long-term structural shift that you're talking about. Not not an imminent price explosion. >> 100% agree. And and it's not everybody's going to do it either. I mean, not all of that 4.8 trillion's going, but they're one brokerage firm. Um, again, you've got Ray Dalio saying you ought to have 15% in gold. If that thinking, you know, anywhere from five to to 20% in gold becomes mainstream, that's a te te tectonic shift, I mean, if you if you look at the average um worldwide for gold penetration in a portfolio, it's about 2% uh over time. Uh right now, we're about 1/ half of 1% worldwide. Imagine if everybody embraces the idea of Jesus just 5% in gold. I mean, I like 10% for net worth, but just 5% in gold. That's a a scale of magnitude of 10 times what they're holding right now. It's massive. >> Yeah. Hey, let's shift gears a bit because I mean, while Wall Street's finally waking up to to gold, it appears. I mean, there's that other story catching fire with investors right now. It's not about institutions or algorithms. It seems like it's it's about people lining up, you know, at coin shops. I keep talking to people about Costco being sold out. Silver is not the only metal getting attention here. We're seeing a surprising revival of interest to collectible and vintage gold coins, even fractional pieces. Um, have you had any of this on the buying side? I know you got some insight here. I mean, when you talk to buyers who are just stepping into the market for the first time, what are they asking for? Are they chasing ounces or stories? The historic pieces, the tangible connection to value? Yeah, I I I would say my my advice here is just a word of caution. Be careful if you're just getting into this market and the and you need to own metal, you don't own any gold at all and the dealer you're talking to suggests that you get into rare coins. Uh it's not the first step. Okay. Um they're suggest the dealer suggesting that because the margins are much better for them and that's going to be better for them. It's not necessarily better for you. I think the first step always is going to be start with gold and silver bullion and you take delivery of that. Okay. Um so that's what people that come to us are hearing. Um and that's largely what they're buying. The premiums in the the collectibles market have kind of come down and stayed there for a long period of time. Uh there's still plenty of metal in the marketplace being absorbed. um you know, collectible metal in the marketplace being absorbed and those premiums haven't really ramped back up except for the very very high-end merchandise. Um that is completely unflawed. I mean, the the buyers are very very particular and picky right now. Um so that's the merchandise that's doing well. The generic material is not doing well. It will um but it's not really doing well right now. You can get some at better premiums, but I still think your first step when you when you wait into this market is going to be bullion. That's how you get your wealth insurance in place. You can diversify into collectibles afterward would be my suggestion. >> And you know, we all go into X and we see these lineups in China and Shenzhen and what have you. Are you experiencing the same thing? I mean, are there real lineups and these rapid sellouts? What or is it more the steady buying from from seasoned investors? Uh I I think right now it's still the steady buyer buying from seasoned investors, although they are starting to refer their friends, you know. So we're we're getting calls from people I haven't talked to in a while. Um you know, we've reached out to them over the past few years, but they're reaching out to us now and they're saying, "Oh, by the way, I have one or two or three people that that I I need to to have a conversation with you. They need to take care of some gold." So, we're starting to see that. Um you know, I don't have a storefront where you line up around the block and and and buy. Um we're far from from that. For us, we see it on the the phone volume. Uh the last bull market uh late stage 2009 2010, you know, with six sales reps on the phones, we had 200 calls an hour incoming. >> All right. We're not there. We are not there. Um >> just starting. >> It is absolutely picking up. We have a a wave, a ripple. We don't have a tsunami just yet. >> Yeah. So, I mean I mean you called this a massive opportunity. So, let's get specific. I mean, you've previously defined gold as as wealth insurance and silver is kind of for its profit potential. For the investor with cash today, why should they choose one over the other? I mean, is it time to be buying insurance or is it kind of time to be speculating on profit? >> Yes. >> So, easy answer. >> Yeah, I think you need both. Um, here I always Jeremy with me, the first is going to be gold. It's always going to be gold. You take care of your insurance first. When when I first got here, I didn't have two nickels to scratch together. Um, and I wanted to work with a financial adviser. The first thing they did, they didn't talk about stocks to own or anything like that. First thing we did is we put our insurance house in order. We're talking about homeowners, auto, uh, umbrella policies, whatever the case might be. And you build that that protection for when you start filling the house up, uh, so to speak. And I think it's the same same way with precious metals. The first thing you do is you buy that gold, that wealth insurance, that proven store of purchasing power for that financial crisis you hope you never have with basically the highest liquidity of anything out there in the marketplace right now. So, start with gold. Um, you still have plenty of upside. Uh, cuz even if your motivation is insurance, you're still going to want to see it go up, right? Um, that we're just that's natural. That's ingrained in all of us. Um, and you still have plenty of upside here. uh then I think you look to silver uh for profit. I I I don't think uh we're anywhere near the end. I think at the end of this market, at the end of this bull market, you know, looking at 45-year cup and handle formations for silver, uh you're probably getting to $90 to $100 an ounce. Uh at a 50 to1 ratio, you're looking at at least $5,000 gold at a bare minimum. Um, but if you look at the Dow gold ratio, uh, to get that down to five, you either need what, $89,000 gold or the Dow's got to drop to 20,000. Uh, somewhere in the middle is probably the answer. I think you've got plenty of room to grow on both metals. >> Yeah. Okay. This is good. This is a good way to to sum it up because I had a note here. I mean, I was going to ask you for your outlook, right? I mean, uh, we talked about $5,000 gold. Let's also get it on the silver, but I'm curious more than that. I mean, what's the indicator that you're kind of watching to confirm it right now? I mean, is it the gold silver ratio, which you've said signals retail participation? Is it physical premiums or is it something else? I mean, what what's that specific data point that the audience should should really understand by what's coming next? >> Yeah. Well, I I gave you a whole list of indicators that I look at, and the way I look at them is it's not one or the other. I don't think any of one anyone is more important than the next. I think you need to start three start to see three or four of them converging kind of like rain clouds and if you have enough of them you're going to get some rain. Um and that's that's when it's time to start looking for the exits. We don't see any of these indicators firing right now. And when I look to where the the gold and silver prices can go, uh one of the things I look at for silver is the gold silver ratio. And like I said, that kind of confirms a 100 to to 5,000 silver to gold, right? um with uh the cup and handle formation on silver, it kind of confirms that at $90 to $100 an ounce silver uh with the breakout that we saw earlier this year. With gold, again, I think the central banks gave us a head start. I still think that $5,700 is probably conservative by the end of this bull market. Um but I tend to be more conservative. I don't have the legs to be a cheerleader. >> Yeah. Yeah. Well said. Okay. I got to play devil's advocate, too. I mean, if we see a sharp rebound in interest rates and the dollar strengthens or maybe we see central banks pause or reverse purchases, what's the scenario where gold, you know, where the where the premium on gold and silver collapses? Do you think it's maybe an oversold rally? I mean, it seems like we're not going to go below certain points anymore. It seems like with all this debt, it's been revalued. >> Yeah, I I do believe it has been revalued, and I don't think we're going to see the the the rug pulled out from under us, if you will. I think you'll see signs that it's coming down, but again, these indicators have to start firing. Gold doesn't come down unless these things start to happen. None of them are happening. That's what you watch for. Um, and when we start to see them come together, we see that conversion. We see the uh gold or the convergence. We see the gold silver ratio down 35 to 50. We see the gold price hitting those targets, the silver price hitting those targets. The duration is somewhere 5 to 10 years down the line. Um, when all of that comes together, interest rates are going up, the dollar is getting stronger, which by the way, it is not. Um, and I I don't buy the past week where it went from 9889 to 9908. I mean, that's just not enough to show strength. When when all that starts coming together, um, then you'll know and you can start easing your way out of the market. If you bought the metal for insurance, you're not going to sell it anyway. I don't care if it goes to $200. It's still going to do its job in terms of preserving purchasing power, but what you bought for profit, you would start selling and I would average out of the market just like you moved into it. >> Yeah, well said. All right, Rich. Uh, appreciate this. It feels like you're buying the dip out here. I mean, you've been in this a long time. You see anything like this? It doesn't worry you. I mean, it seems like it's conviction in the face of volatility here. >> Well, there's no question, J. I mean, we've seen this before. The the the bull market from 01 to 2011. Um, you remember when it got up to what, uh, 750 or 800, something like that? It dropped back down to $4,500 an ounce. Everybody said, "It's over. We're done. Run for the hills." And, and it didn't stop till it got to 1921. So, yeah, we've seen this before. No panic here. Embrace it. >> All right, Richen of Asset Strategies International joining us. Thanks for your time and your insights on this pivotal day in the markets. Uh, once again, my friend, I'll see you soon. >> Looking forward to it. Thanks, Jeremy. >> Appreciate your time. All right, for our viewers, the message is clear. look past the short-term noise and focus on the long-term fundamentals. Now, we'll be tracking this story closely as always, just for you. Subscribe here to Kiko News for the latest updates. I'm Jeremy Saffron, and we'll see you next time. Heat. Heat.